Download this Paper Open PDF in Browser

Internet Banking in Europe: A Comparative Analysis

28 Pages Posted: 17 Feb 2009  

Peter Claeys

Vrije Universiteit Brussel (VUB) - Faculty of Economic, Social and Political Sciences; European University Institute - Economics Department (ECO)

Francesca Arnaboldi

University of Milan

Date Written: December 15, 2008

Abstract

A key strategic issue for banks is the implementation of internet banking. The 'click and mortar' model that complements classical branch banking with online facilities is competing with pure internet banks. The objective of this paper is to compare the performance of these two models across countries, so as to examine the role of differences in the banking system and technological progress. A fuzzy cluster analysis on the performance of banks in Finland, Spain, Italy and the UK shows that internet banks are hard to distinguish from banks that follow a click and mortar strategy; country borders are more important. We therefore explain bank performance by a group of selected bank features, country-specific economic and IT indicators over the period 1995-2004. We find that the strategy of banking groups to incorporate internet banks reflects some competitive edge that these banks have in their business models. Extensive technological innovation boosts internet banking.

Keywords: Banks, Internet, Innovation

JEL Classification: G21, O32

Suggested Citation

Claeys, Peter and Arnaboldi, Francesca, Internet Banking in Europe: A Comparative Analysis (December 15, 2008). Available at SSRN: https://ssrn.com/abstract=1343684 or http://dx.doi.org/10.2139/ssrn.1343684

Peter Claeys

Vrije Universiteit Brussel (VUB) - Faculty of Economic, Social and Political Sciences ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 191
B-1050 Brussels
Belgium

European University Institute - Economics Department (ECO) ( email )

Villa San Paolo
Via della Piazzuola 43
50133 Florence
Italy

Francesca Arnaboldi (Contact Author)

University of Milan ( email )

Via Festa del Perdono 7
Milan, 20122
Italy

Paper statistics

Downloads
815
Rank
23,853
Abstract Views
2,967